Are Arbitration Provisions of a Will Enforceable?

I have written previously that arbitration clauses in trust are enforceable against the beneficiaries. Normally, arbitration clauses are not enforceable against someone unless they agreed to be bound by arbitration. In the trust context, the Supreme Court has held that if a trust contains an arbitration clause and you receive benefits from the trust, you are agreeing to the arbitration clause. This is called direct-benefits estoppel. I said in that article that the same rule would probably apply to an arbitration clause in a will. Well, there is a case now involving an arbitration clause in a will.

In the will case, the Testator’s will contained a provision requiring arbitration of all disputes. 14-18-00003-CV. The Successor Administrator sued the Former Executor for several alleged breaches of fiduciary duty. Former Executor moved to compel arbitration. The trial court denied the motion and Former Executor appealed.

The appeals court also denied arbitration. They said that direct-benefits estoppel did not apply because the Former Executor did not receive benefits. The Former Executor claimed that the fees that the he received were benefits under the will so the arbitration clause required arbitration. The court explained that Successor Administrator’s claims are not based on allegations that Former Executor violated the terms of the will. Instead, the breach of fiduciary duty claims against Former Executor were derived from statutes and common law, irrespective of the will itself. In addition, Successor Administrator’s entitlement to fees is based on Texas Estates Code § 352.051, not the will.

So, the implication is that arbitration clauses in wills are enforceable under the right circumstances.

Note: A 2019 case denied an interlocutory appeal of an order to arbitrate. A party sued a trust company for inappropriately distributing funds. The trust company demanded arbitration which the trial court ordered. The party that did no want arbitration attempted an interlocutory appeal. The appeals court denied the appeal saying that only orders denying arbitration are subject to interlocutory appeals, not orders granting arbitration.  11-19-00017-CV.

Does A Texas Will That Says “all other things owned by me…” Include Everything Owed By The Testator

 

The will

In a recent Texas inheritance dispute out of the Fort Worth Court of Appeals, In the Estate of Larry Ronald Neal, Deceased, No. 02-16-00381-CV, (Tex. App. –Fort Worth, Delivered: November 9, 2017), the question was what did the testator mean in his will. The will stated that the beneficiary (a niece) would receive “all my personal effects and all my tangible personal property, including automobiles, hangars, aircraft, fly-drive vehicles, patents, companies, and all other things owned by me at the time of my death, including cash on hand in bank accounts in my own name, or companies[`] names, or securities, or other intangibles.”

The dispute

The testator’s children asked the court to declare that he died intestate as to his real property since it was not mentioned in the will. The niece claimed that the phrase “and all other things owned by me at the time of my death” was meant to include the real estate. (more…)

How To Disinherit Someone In Texas

How to disinherit someone in TexasHow To Disinherit Someone prior to 1991

Before 1991, you could not disinherit your heirs in Texas by stating that in your will. The only way to make sure that an heir did not inherit from you was to give all of your property to someone else in your will. As an old Texas Supreme Court ruling said ” . . . The right of the heir is defeated only by a substitution of some person to take in his place, and not by a declaration, or express intention, that he shall not take. Hence, though the heir is expressly disinherited, as if a man by his will should declare that his heirs or next of kin shall have no part of his estate, and not direct who shall have it, still the heir would take, not under the will, but under the law; for there must be in the will a devisee, to supplant the heir. . . . “. If the testator fails to make an effective disposition of his property to another, the property will pass to his heirs at law under the laws of intestate succession even though this might be against the testator‘s (more…)

HOA Expenses after Death.

HOA fees after death.HOA or Home Owner’s Association fees are much more common today than they used to be in the past. Most condominiums have an HOA. Small subdivisions may also have home owner’s associations. These associations are set up by the original builder or developer to help market the property. Once all of the units are sold, the developer will generally turn over the HOA to the owners of the units. These HOA’s have rules to protect the homeowner’s from each other. You don’t want your neighbor putting a car in his front yard, putting it up on jacks to work on then leaving it for (more…)

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